Economy and Class Structure in the West

Abstract

In our account of nineteenth-century British capitalism in the last chapter, we noted that in the initial stages of capitalist development each company’s owner or owners typically supervised the work of their employees and directed the overall operation of the enterprise. However this clearly is not an adequate description of the modern corporation, as we indicated. The analysis of the entrepreneurial firm demonstrates that surplus value is generated by the employees and appropriated by the employers (capitalists), but we cannot simply assert by analogy that similar processes take place in the modern corporation, for it is far from obvious that the entrepreneurial firm is relevantly similar for the analogy to hold. There have been fundamental changes in the size, structure, ownership and environment of the firm so that any valid attempt to discern a surplus value producing process must not start by abstracting from these changes but recognise that they have taken place and that their significance requires careful analysis. Even in highly industrialised capitalist societies there are very many small firms, particularly in personal services, agriculture and retailing, but they are increasingly exposed to competition from big firms and are dependent on them for supplies or demand.¹